US President Joe Biden has announced how it plans to invest in infrastructure, including rail, in his administration’s American Jobs Plan, which will see a 2 trillion USD investment over the next eight years, equating to roughly 1 percent of GDP.
In the White House statement the administration said that despite the United States being the wealthiest country in the world, it ranked 13th in terms of its infrastructure. That is why 621 billion USD are to go towards infrastructure spending dedicated to rail systems, as well as roads, bridges and ports. Creating jobs and investing in improving the country’s infrastructure will see funds going to the rail industry:
President Biden has also proposed a “Made in America” tax, which would raise the corporate tax rate to 28 percent, with the statement saying that the “tax plan will return corporate tax revenue as a share of the economy to around its 21st century average from before the 2017 tax law and well below where it stood before the 1980s. Further tax reforms aim at discouraging offshoring and working with other countries to prevent corporations from moving headquarters to tax havens.
One element to President Biden’s tax reforms that will create a more level playing field for the rail industry is his aim to eliminate tax preferences for fossil fuels and make polluting industries pay for the environmental clean up. At the moment, the fossil fuel industry gets billions of dollars in subsidies, loopholes and special foreign tax credits.
In addition to implementing these measures, the administration will invest in their enforcement.
The Association of American Railroads (AAR) said, however, that the country’s privately owned freight railroads “raised serious concerns” about the administrations plans for how to pay for the proposals.
“America’s railroads have long recognized the need for robust, sustainable funding back into the nation’s integrated transportation network.
“President Biden’s proposal makes clear his administration’s priority for making these much-needed investments to restore our highways, bridges and roads, and improve our ports. At the same time, mission number one is fueling an economic recovery. Railroads would urge the administration and Congress to abandon these divisive, unrelated funding sources and instead work toward bipartisan solutions to restore the Highway Trust Fund to a true user-pays system.”
Amtrak welcomed the plan to boost infrastructure spending, saying that if Congress provided the funding, it would be able to bring the Northeast Corridor to a state of good repair and expand the destination it serves. Currently, many bridges, stations and tunnels on the NEC are beyond their design life and therefore in need of immediate replacement or rehabilitation.
“President Biden’s infrastructure plan is what this nation has been waiting for. Amtrak must rebuild and improve the Northeast Corridor and our National Network and expand our service to more of America. The NEC’s many major tunnels and bridges – most of which are over a century old – must be replaced and upgraded to avoid devastating consequences for our transportation network and the country. In addition, Amtrak has a bold vision to bring energy-efficient, world-class intercity rail service to up to 160 new communities across the nation, as we also invest in our fleet and stations across the U.S. With this federal investment, Amtrak will create jobs and improve equity across cities, regions, and the entire country – and we are ready to deliver. America needs a rail network that offers frequent, reliable, sustainable and equitable train service. Now is our time, let’s make rail the solution.”
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